Automakers are spending a lot of time these days wringing their hands about whether economically beleaguered and automotively disinterested twenty-somethings will ever be willing — or able — to buy enough cars from them. So Acura has decided to bypass the angst and appeal mainly to the part of Generation Y that still has some financial wherewithal: consumers in their early 30s.
They’re the target for the brand’s new sedan, ILX. At prices beginning at $25,900 Acura is calling the compact ILX a “gateway” to the luxury segment for those who want and can afford to get on that track.
The ILX launch is important for Acura because the brand is still trying to recover its bearings after last year’s earthquake and tsunami in Japan crushed the sales momentum it had begun to build in the U.S. market. And, according to Acura brand executives, they’re still trying to capture a measure of respect.
“Even with restricted inventories, we still sold more cars last year than Lincoln and Cadillac and Volvo and Audi,” Mike Accavitti, Acura’s U.S. CMO, told me. “Audi gets all these accolades but we sell more cars than them. We’re fourth [in U.S. luxury sales volumes] this year even before high volumes of our two new products, ILX and [a new version of the RDX utility vehicle], have gotten onto dealer lots.”
Indeed, sales of the Honda premium brand are up by 11 percent for this year through May. But the comparison is against a weak year-earlier period. And Acura has some work to do to secure a wider long-term berth in the entry end of the U.S. luxury market.
“The brand has been struggling with what it is over the last half-dozen years,” said Doug Scott, senior vice president of GfK Automotive, a brand-consulting firm in Southfield, Mich. “The problem is that competitors like BMW and Audi, who already are younger and aspirational, are moving more into the more affordable area of the marketplace.”
It looks like they’ll have to fight Acura for some of those buyers: unmarried consumers who’ve achieved some stability financially. The new TV-advertising campaign for the car depicts an ILX owner with his life proceeding separately on two tracks, which literally are occurring in parallel on a split screen in the ads. In one spot, a track shows him in a corporate office, the other at play at hip nightclubs, and they meet when he gets into his ILX.
“Life should be equal parts responsibility and fun,” goes the tagline in both spots. “Move up, without settling down.”
“Our target is older Gen Y and young Gen X-ers, so we wanted to get them doing both things,” said Susie Rossick, Acura brand manager.
Accavitti explained that ILX “was specifically designed for these people because of what they’ve gone through,” Accavitti said. Growing up, “they’ve seen and experienced and touched luxury and wealth. So their expectations are there — but the realities of today’s post-recessionary economy are that this generation may be the first that actually ends up earning less than the previous one.”
While that message seems less inspirational or even aspirational than sobering, Accavitti said Acura is positioning the car as “a special vehicle, with the feeling associated with that kind of car, but it doesn’t cost you an arm and a leg to get into it. It’s designed for our target at this economic [time]. It’s smart luxury.”
For example, ILX has a voice-to-text system built into its infotainment capabilities that includes the capability for issuing pre-programmed responses — such as, Accavitti quipped, “Hey, I’m driving right now!” Pandora internet-based radio is another part of the car’s appeal. Other features include a standard five-inch color display screen and an optional multi-view rear-camera system.
And as with anything explicitly aimed at Millennials, digital marketing and music are huge parts of the ILX push. Its TV and in-theater ads feature notable tunes from The Ting Tings and Nick Waterhouse. Acura is supporting the launch with its largest-ever budget allocation to interactive media, with placement scheduled on sites such as Xbox LIVE, Pandora and the (in-transition) web site that is Good.
The brand also is sponsoring a summer tour by an indie band — whose identity it won’t disclose just yet — that will span five U.S. cities and give lots of love to the ILX, including having the model on display at concert venues and the ILX participating in music videos. Acura also plans ride-and-drive weekend events this summer in Los Angeles, New York, San Francisco, Philadelphia and Chicago, with about 200 people expected to attend each day.
Will response to ILX be music to Acura’s ears? Accavitti is confident that ILX will help the brand get fully back on track; meanwhile, sales of MDX, its highest-volume vehicle, are about flat with a year ago, but the new version of the RDX, launched a couple of months ago, is 36 percent ahead of 2011 sales.
“We were on a roll prior to the natural disaster” last year in Japan as well as flooding in Thailand last fall that further complicated Acura’s supply lines. “We had 13 months of double-digit [year-over-year] sales increases. But once the inventory was so impacted, it was difficult to [sell] at that level.”
And, as Scott noted, Acura’s sibling brand, Honda, has been facing its own difficulties ushered in by the 2011 disaster as well as the shortcomings of its product lineup. “So at a time you’d hope the [Honda] company could focus on Acura and really get it right, the entire organization is having branding issues,” Scott said.
Still, Accavitti said that Acura has always appealed to a younger cohort, on average, than Toyota’s Lexus and Nissan’s Infiniti brands and noted that now the brand is focusing on amplifying that heritage advantage.
“Younger people are more open to the Acura brand,” he said. “They always have been. They value and respect our foundational values of quality and durability and that, as an investment, our cars hold greater value than our competitors’.”
Rossick agreed yet believes Acura can obtain a second look from many of its target buyers. “We’re new and fresh and who these people are looking for,” she said. “We’re confident that we’re talking to this target.”
Acura Targets Viable GenY-ers With New ILX Sedan, Campaign - Forbes